The Black Friday / Cyber Monday weekend is one of the busiest sales periods of the year. Unfortunately, unscrupulous merchants have been known to jack up their “previously sold for” pricing to make it look like you’re getting a better deal. Is this legal?
Under Australian Consumer Law, artificially inflating the ‘Before’ price during a sales promotion is illegal and falls under false advertising. Here’s what the ACCC says on its website:
It is illegal for a business to make claims to customers about its goods or services — including claims about price — that are incorrect or likely to create a false impression.
Businesses must ensure that consumers are not misled about the savings that may be achieved. Statements such as ‘Was $150/Now $100’ or ‘$150 Now $100’ are likely to be misleading if products have not been sold at the specified ‘before’ or ‘strike through’ prices in a reasonable period immediately before the sale commences.
In addition to the above, merchants are supposed to only display recommended retail prices (RRPs) that reflect the current market price of the item. For example, the price of a two-year old smartphone model should not be compared to the original RRP from the time of release. (Unless the market price hasn’t depreciated. )
With that said, retailers are given a fair amount of wriggle room when it comes to displaying two-price advertising. As long as they can prove through business records that the products were recently sold at the before price, the advertisement is considered fair game. (This is why you sometimes see top-whack pricing in the leadup to a big sale.)
Unfortunately, taking retailers to task over this dubious practice is a difficult undertaking – especially for overseas merchants who don’t have storefronts in Australia. Our advice is to do plenty of comparative research on prices before snapping up an online “bargain” – sometimes the savings aren’t all they’re cracked up to be.
Did you just catch yourself wondering if something was legal or not?
Let us know and we may be able to answer it in our next Is It Legal? feature.